Corporate Tax UAE: Important Information Registration Dates Fines
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The recent announcements made by the Ministry of Finance, UAE, have some important updates about UAE Corporate Tax registration, registration dates, fines, and exemptions.  This article will explain everything you need to know to stay compliant with the latest regulations.

The UAE has recently announced its new deadlines for corporate tax registration in 2024 for eligible businesses. A new penalty of  AED10,000 will be levied for late Corporate Tax registration, effective March 1st, 2024. Taxable Persons and special Exempt Persons must register for Corporate Tax with the Federal Tax Authority before the mentioned deadline to avoid legal issues and penalties.

Let’s find out more about the new financial updates and how they will affect existing businesses. Also, how can businesses stay compliant with the new UAE Corporate Tax 2024 laws in the UAE? Let’s go deeper into it!

What Are the New Deadlines?

The Federal Tax Authority’s (FTA) recent announcement states that resident companies established or incorporated in the UAE prior to March 1 must register for corporate tax this year before the specified deadline dates. So, if a company receives its license, say, in the month of March of any year, it must register its corporate tax before May 31st to avoid any penalties.

In the event that a business or group with different verticals of operations has more than one license, the deadline will be based on the “prior issued license to determine the maximum time frame”, as per the FTA.

Moreover, those businesses that received their licenses on or after March 1st, including free zone ones, must make their corporate tax registration within three months of the establishment, incorporation, or recognition date. Also, a company previously established overseas but now under UAE management and control since March 1st must register for corporate tax within three months of their financial year-end.

UAE-managed overseas companies established before March this year must register for corporate tax within nine months of their operation starting date in the UAE. 

Furthermore, an overseas-based firm that has business in the Emirates must register by May 31. An overseas firm relocating to the UAE and starting its operations on or after March 1st must register for corporate tax within six months.

The UAE Corporate Tax Rate

The federal corporate tax as introduced in the UAE was at a standard statutory rate of 9 percent on or after June 1st, 2023. 

Companies with an income of over AED 375,000 ($102,110) came under the taxable bracket. Companies with an income below that level will be subject to a zero percent tax.

The Ministry of Finance stated in May that companies in the Emirates would be eligible to pay corporate tax if their earnings in a financial year go beyond AED1 million. If a business only makes AED 500,000 as its financial year earnings, then that business won’t be taxed under this law. So it’s clear that only those businesses with higher earnings will be taxed.

For instance, if a UAE-based firm earns over AED 1 million in a financial year, the company’s income will be taxed under the new corporate law. However, if an UAE resident earns from personal investments like property rentals, the earnings won’t be taxed under the new corporate law as they don’t fall into the Taxable bracket.

How Do I Register for UAE Corporate Tax 2024?

Companies in the UAE that fall into the corporate tax bracket need to submit their registration application to the Federal Tax Authority for Taxable Businesses and get a tax registration number. They must file a tax return with the FTA before 9 months after the financial year ends. In the case of a group of companies, the parent company must file a single tax return with the FTA on behalf of the group. 

Who is Tax- Exempt?

Corporate tax exemptions are offered to government-controlled institutions, qualifying public benefit entities, extractive and non-extractive natural resource businesses, government institutions, qualifying investment funds, private pension or social security funds, and public pension or social security funds. 

Moreover, an exempt person is one who owns or controls an institution or entity that takes care of the person’s financial activities, exclusively invests in funds, or manages the person’s assets, providing him with profits, if that entity is exempt from corporate tax. Also, the FTA might request specific tax-exempt persons for UAE corporate tax registration.

Finally, the UAE corporate tax 2024 update states the new deadlines for corporate tax registration and the penalty for delayed registration. The above information gives a brief idea of the latest updates in this field, so businesses can consult a legal expert to stay informed and apply for registration if they are eligible.